DELAWARE | 1-12793 | 84-1370538 |
(State or other jurisdiction of incorporation or organization) | (Commission File Number) | (I.R.S. Employer Identification No.) |
£ | Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
£ | Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
£ | Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
£ | Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Exhibit Number | Exhibit Description |
99.1 | Press Release dated August 10, 2015 |
99.2 | Financial Scorecard as of June 30, 2015 |
STARTEK, INC. | ||
August 10, 2015 | By: | /s/ Lisa A. Weaver |
Lisa A. Weaver Senior Vice President, Chief Financial Officer and Treasurer |
• | STARTEK acquired Accent Marketing Services, L.L.C. (“ACCENT”), a business process outsourcing provider offering customer engagement solutions, for a purchase price, including working capital adjustments, of $18.3 million |
• | Signed $4.3 million of new business, including one new logo |
• | Revenue from verticals excluding telecommunications/cable and media increased to $17.9 million compared to the year-ago quarter of $3.8 million and is now approximately 30% of total revenue |
• | Announced John Hoholik, via the ACCENT acquisition, as SVP Global Marketing and GM Customer Engagement |
• | Opened new Hamilton, Ohio location to support domestic sales pipeline |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Revenue | $ | 63,464 | $ | 61,254 | $ | 127,117 | $ | 124,463 | ||||||||
Cost of services | 58,152 | 55,562 | 115,688 | 110,554 | ||||||||||||
Gross profit | 5,312 | 5,692 | 11,429 | 13,909 | ||||||||||||
Selling, general and administrative expenses | 8,582 | 7,301 | 16,643 | 15,549 | ||||||||||||
Restructuring charges | 1,536 | 2,051 | 2,343 | 2,242 | ||||||||||||
Operating loss | (4,806 | ) | (3,660 | ) | (7,557 | ) | (3,882 | ) | ||||||||
Interest and other income (expense), net | (100 | ) | (17 | ) | (337 | ) | (145 | ) | ||||||||
Loss before income taxes | (4,906 | ) | (3,677 | ) | (7,894 | ) | (4,027 | ) | ||||||||
Income tax expense (benefit) | 163 | (396 | ) | 350 | (246 | ) | ||||||||||
Net loss | $ | (5,069 | ) | $ | (3,281 | ) | $ | (8,244 | ) | $ | (3,781 | ) | ||||
Net loss per common share - basic and diluted | (0.33 | ) | (0.21 | ) | (0.53 | ) | (0.25 | ) | ||||||||
Weighted average shares outstanding - basic and diluted | 15,523 | 15,391 | 15,470 | 15,384 |
June 30, 2015 | December 31, 2014 | |||||||
ASSETS | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 6,394 | $ | 5,306 | ||||
Trade accounts receivable, net | 52,823 | 46,103 | ||||||
Other current assets | 5,096 | 3,099 | ||||||
Total current assets | 64,313 | 54,508 | ||||||
Property, plant and equipment, net | 34,250 | 28,180 | ||||||
Other assets | 21,852 | 11,105 | ||||||
Total assets | $ | 120,415 | $ | 93,793 | ||||
LIABILITIES AND STOCKHOLDERS' EQUITY | ||||||||
Current liabilities | $ | 60,645 | $ | 31,672 | ||||
Other liabilities | 11,003 | 7,440 | ||||||
Total liabilities | 71,648 | 39,112 | ||||||
Total stockholders’ equity | 48,767 | 54,681 | ||||||
Total liabilities and stockholders' equity | $ | 120,415 | $ | 93,793 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating Activities | ||||||||||||||||
Net loss | $ | (5,069 | ) | $ | (3,281 | ) | $ | (8,244 | ) | $ | (3,781 | ) | ||||
Adjustments to reconcile net loss to net cash provided by (used in) operating activities: | ||||||||||||||||
Depreciation and amortization | 3,252 | 2,614 | 6,288 | 4,970 | ||||||||||||
Gains on disposal of assets | (507 | ) | (180 | ) | (507 | ) | (175 | ) | ||||||||
Share-based compensation expense | 417 | 462 | 913 | 864 | ||||||||||||
Amortization of deferred gain on sale leaseback transaction | (57 | ) | (65 | ) | (114 | ) | (129 | ) | ||||||||
Changes in operating assets & liabilities and other, net | 1,464 | 3,311 | 1,686 | (222 | ) | |||||||||||
Net cash provided by (used in) operating activities | (500 | ) | 2,861 | 22 | 1,527 | |||||||||||
Investing Activities | ||||||||||||||||
Proceeds from note receivable | — | 160 | — | 319 | ||||||||||||
Purchases of property, plant and equipment | (1,700 | ) | (4,471 | ) | (5,209 | ) | (6,825 | ) | ||||||||
Proceeds from sale of assets | 982 | 639 | 982 | 639 | ||||||||||||
Cash paid for acquisition of business | (18,326 | ) | — | (18,326 | ) | — | ||||||||||
Cash paid for prior period acquisitions of businesses | (200 | ) | (201 | ) | (434 | ) | (400 | ) | ||||||||
Net cash used in investing activities | (19,244 | ) | (3,873 | ) | (22,987 | ) | (6,267 | ) | ||||||||
Financing Activities | ||||||||||||||||
Other financing, net | 19,562 | 513 | 23,969 | 19 | ||||||||||||
Net cash provided by (used in) financing activities | 19,562 | 513 | 23,969 | 19 | ||||||||||||
Effect of exchange rate changes on cash | 111 | (273 | ) | 84 | (231 | ) | ||||||||||
Net increase (decrease) in cash and cash equivalents | (71 | ) | (772 | ) | 1,088 | (4,952 | ) | |||||||||
Cash and cash equivalents at beginning of period | $ | 6,465 | $ | 6,809 | $ | 5,306 | $ | 10,989 | ||||||||
Cash and cash equivalents at end of period | $ | 6,394 | $ | 6,037 | $ | 6,394 | $ | 6,037 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Net loss | $ | (5,069 | ) | $ | (3,281 | ) | $ | (8,244 | ) | $ | (3,781 | ) | ||||
Income tax expense (benefit) | 163 | (396 | ) | 350 | (246 | ) | ||||||||||
Interest expense (income), net | 621 | 175 | 928 | 298 | ||||||||||||
Restructuring charges | 1,536 | 2,051 | 2,343 | 2,242 | ||||||||||||
Depreciation and amortization expense | 3,252 | 2,614 | 6,288 | 4,970 | ||||||||||||
Gains on disposal of assets | (507 | ) | (180 | ) | (507 | ) | (175 | ) | ||||||||
Share-based compensation expense | 417 | 462 | 913 | 864 | ||||||||||||
Adjusted EBITDA | $ | 413 | $ | 1,445 | $ | 2,071 | $ | 4,172 |
Three Months Ended June 30, | Six Months Ended June 30, | |||||||||||||||
2015 | 2014 | 2015 | 2014 | |||||||||||||
Operating loss | $ | (4,806 | ) | $ | (3,660 | ) | $ | (7,557 | ) | $ | (3,882 | ) | ||||
Restructuring charges | 1,536 | 2,051 | 2,343 | 2,242 | ||||||||||||
Operating loss before restructuring charges | $ | (3,270 | ) | $ | (1,609 | ) | $ | (5,214 | ) | $ | (1,640 | ) |
Operating Results Scorecard | ||||||||||||||||||||||||||
As of June 30, 2015 | ||||||||||||||||||||||||||
Q1-14 | Q2-14 | Q3-14 | Q4-14 | 2014 | Q1-15 | Q2-15 | 2015 | |||||||||||||||||||
Revenue (millions) | ||||||||||||||||||||||||||
Domestic | $ | 33.3 | $ | 30.9 | $ | 30.7 | $ | 35.6 | $ | 130.6 | $ | 35.6 | $ | 37.1 | $ | 72.7 | ||||||||||
Offshore | $ | 21.1 | $ | 21.0 | $ | 22.5 | $ | 21.2 | $ | 85.8 | $ | 20.3 | $ | 18.1 | $ | 38.5 | ||||||||||
Nearshore | $ | 8.8 | $ | 9.3 | $ | 8.3 | $ | 7.3 | $ | 33.7 | $ | 7.7 | $ | 8.2 | $ | 15.9 | ||||||||||
Company Total | $ | 63.2 | $ | 61.3 | $ | 61.4 | $ | 64.2 | $ | 250.1 | $ | 63.7 | $ | 63.5 | $ | 127.1 | ||||||||||
Revenue % | ||||||||||||||||||||||||||
Domestic | 52.7 | % | 50.5 | % | 50.0 | % | 55.5 | % | 52.2 | % | 56.0 | % | 58.5 | % | 57.2 | % | ||||||||||
Offshore | 33.3 | % | 34.3 | % | 36.6 | % | 33.1 | % | 34.3 | % | 31.9 | % | 28.6 | % | 30.3 | % | ||||||||||
Nearshore | 14.0 | % | 15.2 | % | 13.5 | % | 11.4 | % | 13.5 | % | 12.1 | % | 13.0 | % | 12.5 | % | ||||||||||
Company Total | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | 100.0 | % | ||||||||||
Gross Profit (millions) | ||||||||||||||||||||||||||
Domestic | $ | 4.5 | $ | 2.6 | $ | 3.0 | $ | 2.7 | $ | 12.9 | $ | 2.4 | $ | 2.2 | $ | 4.6 | ||||||||||
Offshore | $ | 3.6 | $ | 2.6 | $ | 5.1 | $ | 3.9 | $ | 15.2 | $ | 2.5 | $ | 1.8 | $ | 4.3 | ||||||||||
Nearshore | $ | 0.1 | $ | 0.4 | $ | 0.9 | $ | 0.9 | $ | 2.3 | $ | 1.2 | $ | 1.3 | $ | 2.5 | ||||||||||
Company Total | $ | 8.2 | $ | 5.7 | $ | 9.0 | $ | 7.5 | $ | 30.5 | $ | 6.1 | $ | 5.3 | $ | 11.4 | ||||||||||
Gross Profit % | ||||||||||||||||||||||||||
Domestic | 13.6 | % | 8.5 | % | 9.9 | % | 7.6 | % | 9.9 | % | 6.8 | % | 6.0 | % | 6.4 | % | ||||||||||
Offshore | 17.1 | % | 12.5 | % | 22.6 | % | 18.3 | % | 17.7 | % | 12.4 | % | 10.0 | % | 11.3 | % | ||||||||||
Nearshore | 0.8 | % | 4.5 | % | 11.2 | % | 12.7 | % | 6.9 | % | 15.4 | % | 15.6 | % | 15.5 | % | ||||||||||
Company Total | 13.0 | % | 9.3 | % | 14.7 | % | 11.7 | % | 12.2 | % | 9.6 | % | 8.4 | % | 9.0 | % |
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